Brussels is discussing restrictions on sure EU exports to international locations that it suspects are re-exporting sanctioned merchandise to Russia, in an effort to forestall crucial elements from ending up on the Ukrainian battlefield.
The European Fee has privately examined a authorized mechanism that will allow it to limit gross sales of a slim vary of merchandise to sure third international locations, individuals briefed on the discussions informed the Monetary Occasions, because it seeks to shut loopholes which have permitted banned merchandise to leak into Russia and contribute to its army effort.
The transfer would mark a big escalation of the EU’s efforts to clamp down on sanctions circumvention, and follows months of diplomatic efforts by Brussels and its allies aimed toward convincing international locations corresponding to Turkey and the UAE in addition to central Asian states to take harder motion.
Some member states are uncomfortable with the potential ramifications of the proposal, together with the way it may have an effect on relations with third international locations, the individuals added. It’s set for additional dialogue subsequent week.
Underneath the mooted mechanism, the EU would first draw up a authorized framework enabling merchandise and international locations of concern to be recognized, however with out naming them. After due warning, it may then add the names of focused merchandise and locations to export controls.
The concept was floated throughout discussions between the fee and prime EU diplomats final week, in accordance with individuals aware of the method, as Brussels prepares its eleventh sanctions bundle.
Nevertheless, it raises huge questions, together with over the geopolitical implications of proscribing commerce with international locations that aren’t immediately concerned within the Ukraine battle — even when the curbs could be extremely focused and short-term.
It is usually unclear how to make sure that the restrictions could be suitable with world commerce guidelines, and what sort of authorized procedures could be wanted to place them into power, mentioned one diplomat. Member states would retain remaining sign-off on any particular measures.
“It should result in fairly some dialogue within the EU — over whether or not we’re comfy doing that,” mentioned the diplomat. “How do you keep away from the unintended side-effects of pushing sure international locations in a special route to the place you need them to go? It’s a must to be very cautious on how you utilize carrots and sticks.”
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The proposed mechanism displays a rising sense amongst western powers that enforcement of present sanctions, quite than new measures, is the best method to degrade Russia’s economic system additional.
Contained in the G7, the US is asking for a full ban on exports to Russia after rising pissed off by the variety of loopholes that Moscow has exploited to import western know-how through third international locations.
Whereas the EU and Japan have resisted that proposal, they’re set to agree at a G7 summit subsequent month to “shut loopholes that enable [third-country] jurisdictions to entry and re-export restricted G7 items, providers or know-how to Russia”, in accordance with a draft assertion seen by the FT.
“The general mechanism appears to be broadly supported by capitals,” mentioned a second EU diplomat. “However there’s some hesitation from some quarters relating to what the implications on relations with companions could be.”
The European Fee declined to remark.
Further reporting by Laura Dubois in Brussels
